The country’s burden of loan interest payments over the next five years will not exceed the international standard level, said Patricia Mongkhonvanit, director general of the Public Debt Management Office (PDMO).
Ms. Patricia said the office was closely monitoring the relationship between the interest burden and the country’s estimated annual revenue.
She said the ratio is estimated at 8% at the end of fiscal 2022 and will remain below 10% for the next five years.
The international standard for the ratio is 10% or less.
Ms. Patricia said Thailand should pursue an expansionary fiscal policy to support economic growth.
During the period 2015-2021, the government invested more than 2.6 trillion baht in 178 megaprojects, covering transport, utilities and energy.
The PDMO also developed the Public Debt Management Plan 2022-26 to meet the government’s planned spending of an additional 840 billion baht for megaprojects during the 2022-26 period.
She said local loans accounted for 98% of the bureau’s borrowing, indicating its low exposure to currency risk.
In addition, more than 83% of total borrowings have fixed interest rates.
The government has raised the public debt-to-GDP ratio ceiling from 60% to 70% to provide more fiscal space for possible additional borrowing in the future as Thailand continues to struggle with the impact of the Covid-19 pandemic.
Ms. Patricia said that in the future, the government may review the debt ceiling once the economic situation normalizes.
The ratio of public debt to GDP stood at 60.2% in February. It should reach 62.7% at the end of the 2022 financial year, below the ceiling of 70% of GDP.
The government has set aside 2.5-4% of annual expenses to pay the principal of the loan.